Self Directed Brokerage Account

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What is SDBA?

Over the past several years, many employers have enhanced their retirement plans to include a brokerage window opportunity so that plan participants have more choice and greater flexibility with their retirement investments. This option, known as the Self-Directed Brokerage Account (SDBA), exists in 401(k), 403(b), or 457 plans where participants have access to professional management, stocks, bonds, mutual funds and ETFs.

How It Works

Plans that offer the SDBA option provide opportunities for employees to take full control of their current retirement account by linking it to the existing Core account. The Core account refers to the retirement account through the employer that offers limited, pre-selected investment choices. In doing so, participants expand the range of investment choices beyond the Core plan investments and will have access to the same management style as high net worth investors, institutions, and foundations.

While SDBAs are underutilized, this option should be used by investors who feel comfortable managing their own risk or working with a professional investment advisor.

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